The Trends Transforming Malls

The truth is, the term “shopping mall” seems so, well, antiquated. Doesn’t it? Malls are becoming less a shopping destination and more a mixed-use hub, as offices, hotels, dining, and entertainment become the stalwart of such centers.

Mall owners continue to move from an apparel focus to create retail-and-services ecosystems that include a variety of uses. Hotels and residential uses are even making there way into malls.

Department store consolidation

More than 1,000 department stores will close between now and 2023. The problem became that America over-retailed and too many companies invested in too much square-footage. Many also failed to respond to the changing marketplace. Malls, facing the brunt of those closing, are left to reevaluate and reinvent themselves.

Shift to services

Even as consumer confidence continues to rise, shoppers remain fairly cost-conscious. At the same time, consumers are also opting to pay for experiences over goods. By 2023, an estimated $78 billion will be lost in spending on goods and instead shifted to services.

Online apparel sales

Apparel stores, one of the pillars of American malls, have struggled in recent years. E-commerce (set to capture one-third of apparel sales by 2023), international brands, and off-price retailers are creating a whirlwind of disruption for traditional apparel stores. But in addition to growing e-commerce shares, the truth is, the apparel industry is losing its luster overall. As this Bloomberg article points out, in 1977 clothing accounted for 6.2 percent of U.S. household spending. Now, it accounts for just half that.

Aging of millennials

Coresight also notes that more than 50% of U.S. consumers will be either millennials or Gen Z by 2023. And younger generations are increasingly seeking experiences over products. A.T. Kearney found that in 2015 28% of younger consumers’ discretionary spending was done on experiences and predicts that number to rise to 32% by 2030.

Growth in nontraditional channels

Consumer spending has also experienced a noticeable shift towards alternative retail methods such as subscription and rental services. Companies like Birchbox, Loot Crate, Rent the Runway, and Ipsy have burst onto the scene to steal consumers. Additionally, some brands are shifting away from retail stores and creating direct-to-consumer models. By 2030, Americans are expected to spend roughly $17 billion on such nontraditional channels.

As we’ve said before the American mall isn’t dead, and reports of its imminent death are greatly exaggerated. Instead, they are just going to evolve. They’ll become hubs for a number of number of new uses, and the trends that will shape the malls of the future will likely continue to change the entire retail sector for years to come.

SimonCRE is a full service commercial real estate developer founded in 2010 by Joshua Simon, with the goal to create a company that redefined the commercial real estate development industry. Joshua wanted to build a company that was unique, willing to adapt, and left a lasting impact on the communities it served.

The company was established on a set of core values and beliefs that have helped SimonCRE to become a leader in the commercial real estate development industry. Through knowledge, experience, integrity, hard work, and technology, SimonCRE has, and continues to make a name for itself.

DNA of #CRE Survey

It is with bubbling excitement and fanfare that we are thrilled to announce the 4th anniversary (OMG 4 years have gone by!) of the amazing collaboration between Buildout and theBrokerList to produce the 2018 #DNAofCRE Survey. Remember, we are saying 2018 because we are asking you to download your brain and tell us what you did last year!

485 Respondents for DNA of #CRE Survey! Yes, you heard right, almost 500 commercial real estate professionals contributed to the 2017 DNA of #CRE Survey this year! That is an increase of 60% over last year! This year was so special because we had so much enthusiasm as a result of this being our 3rd year. […]

Just an Idea The idea of the DNA of #CRE survey began as a collaboration between Buildout and theBrokerList teams. We all wanted to know more about the people who make up the commercial real estate brokerage industry because it has been such a hard to understand facet of real estate. Generally people think of […]

Yes, it is true, we completed the first, official tabulation of the 2015 DNA of #CRE Survey! Please review and digest this historic attempt to obtain the actual DNA of the commercial real estate brokerage industry. Huge thanks to the team at Buildout for the amazing collaboration. It was our first one, so we are […]